Category Archives: Technology

The Importance of Legal Literacy to Your Business

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“In a monumental verdict, a jury recently awarded Apple $1.05 billion dollars in damages, determining that Samsung copied the technology used on the iPhone and iPad. Christian Louboutin did not make out as well in its case against Yves St. Laurent. Despite having applied for a trademark for their brand-defining red-soled shoes, the court found that Louboutin could not impede the creativity of other designers and granted Yves St. Laurent the right to copy the well-known fashion statement. From smart phones to high heels, song lyrics to Spider-Man, possessing copyrights, patents and trademarks is the first line of self-defense, as well as highly lucrative.” Alexandre Montagu

Does your company have trademarked or copyrighted products, or are you using designs or technologies that may overlap those of other companies? Then intellectual property is a topic that you ignore at your own risk.

In Montagu’s new book, Intellectual Property, he looks at the dangers and opportunities inherent in this complex arena. Among the major areas that he investigates are:

  • Protecting your brand online – this includes domain name strategy, cybersquatting, fraud and impersonation online.
  • Online copyright infringement – this includes areas like piracy, peer-to-peer sharing and policing piracy online.
  • Indentifying, protecting and monetizing your intellectual property, especially in the industries of fashion, art, music and entertainment.
  • The next step in national security – this involves the well-publicized topic of cyber warfare and cyber attacks on corporations.

In our next Soundview Live webinar, Money and Power in a New Era, Alexandre Montagu will explore the pitfalls of being caught unaware of Intellectual Property law. “Whether it’s the trade secrets of a hedge fund’s algorithms, the copyrights or patents underlying the smart phone, the trademarks that protect well-known brands, intellectual property bastes the modern economy,” he says. Through fascinating anecdotes and compelling court cases, Montagu brings home just how important legal literacy can be for your business.

Why So Many Predictions Fail – But Some Don’t

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THE SIGNAL AND THE NOISE

NO NOISE WITH THIS BUZZWORTHY BOOK

Nate Silver, the creator of the New York Times political blog FiveThirtyEight.com, is probably America’s most well-known statistician, especially after his assertion that a 300-plus electoral college vote victory for Barack Obama was highly probable proved correct. In The Signal and the Noise, Silver explores a wide variety of areas — including electoral politics, sports, weather, terrorism, war and gambling — in which prediction plays a major role. He examines some of the major failures, from Pearl Harbor, 9/11 and the 2008 financial crisis to a whole series of failed earthquake forecasts, to try to understand what went wrong and what can be learned for the future. The problem is not the lack of data — today there is an almost endless supply of information on any topic or question. Instead, the problem is learning how to interpret the information, paying attention to the right information and recognizing the rest as just distraction — in other words, recognizing the difference between a predictive signal and the distracting noise.

Colossal Misinterpretation

Silver begins by examining one of the most colossal errors in prediction in recent times: the world financial crisis that no one predicted. As Silver explains, the signals were present, but were dismissed. As analysts and decision-makers watched continuously rising house prices, they failed to see the potential for a bubble; as they watched the explosion of mortgage-backed securities, they failed to understand the risk of those securities; as they started to consider the potential of a housing crisis, they failed to see that such a crisis could trigger a global financial crisis; and as they dealt with the financial crisis, they failed to predict the long-term impact.

Be Foxy

For Silver, the best forecasters are going to be “foxes,” rather than “hedgehogs.” The metaphor comes from Isaiah Berlin’s famous essay, “The Hedgehog and the Fox.” Hedgehogs believe in big governing ideas from which everything flows, Silver writes. Foxes, on the other hand, believe in little ideas and multiple approaches. Hedgehogs are specialized, stubborn and confident. Foxes are multidisciplinary, self-critical and cautious. The principles of Silver’s FiveThirtyEight blog reflect his “foxy” approach to forecasting. Instead of confidently making one specific forecast and sticking to it, especially if it’s different from what everyone else is saying, Silver offers a range of probable outcomes and is willing to change the predictions in light of new information.

The Human Factor

Despite his mastery of data, Silver notes that the human factor is equally important in making the right predictions. “What is it, exactly, that humans can do better than computers that can crunch numbers at 77 teraFLOPS?” Silver asks, as he considers two meteorologists staring at every screen on the forecasting floor of the National Weather Service headquarters. The answer: “They can see.”

Of course, they can also misinterpret what they see. But Silver is hopeful for the potential of predictions as long as those making the predictions, he writes, adhere to the principles of an 18th century English minister called Thomas Bayes. In a chapter titled “Less and Less and Less Wrong,” Silver describes the probabilistic theory of Bayes, in which someone makes a prediction, looks at the new evidence, confirms or changes the prediction, looks at the new evidence, confirms or changes the prediction, each time getting closer to making the correct prediction. As Silver explains, Bayes taught us that we learn about the universe “through approximation, getting closer and closer to the truth as we gather more evidence.” Bayes theorem implies that “we must become more comfortable with probability and uncertainty,” he writes. “We must think more carefully to the assumptions and beliefs that we bring to a problem.” As Silver demonstrates in detail in such diverse areas as sports, global warming, and terrorism, the more predictions are based on a Bayesian approach, the more likely they are to come true.

The Signal and the Noise is a sprawling, dense book that is as filled with stories and personalities as it is with data. This book will fascinate those who care about what is happening in the world — or what may happen.

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The New Industrial Revolution

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MAKERS

THE NEXT PHASE OF MANUFACTURING

According to Wired magazine editor and best-selling author Chris Anderson, the world is on the cusp of the third industrial revolution, a revolution driven by what he calls desktop manufacturing. The first industrial revolution of the late 1700s, Anderson explains in his new book, Makers, saw the rise of factories and the migration of work from the farm to the cities; the second industrial revolution started in the 1850s with the invention of steam-powered ships and railroads. The information age has been called by some the third industrial revolution, but Anderson disagrees. An “industrial” revolution is about making stuff, he writes, and the information age, while revolutionizing the spread of information, has not redefined manufacturing in any significant way… until now.

A New Age of Manufacturing

Emerging desktop manufacturing technologies, combined with the global resource and reach of the Internet, is going to launch a new age of American manufacturing, just when America needs it most, Anderson writes. The new titans of manufacturing are not going to be the multi-national corporations with their plants spread across the world, but creative do-it-yourselfers, connecting with and using interactive online communities churning ideas, a desktop 3D printer for prototypes, and service bureaus and other “rental” manufacturing resources.

For Anderson, the author of the best-seller The Long Tail, the story of the third industrial revolution is personal. Anderson is not only a writer and editor, but also a do-it-yourself aficionado who has his own invention: a successful autopilot robot that flies model airplanes. But Anderson’s story is quite different from others.

To research potential design ideas, he launched an online open community on the Ning social network platform. “The site wasn’t just about me or my ideas,” Anderson writes. “It was about anyone who chose to participate… The site was soon full of people trading ideas and reports of their own projects and research.” Eventually, he designed his robot, bought the electronics from various sources, outsourced the building of the circuit boards, packed everything in his living room and immediately started selling his invention worldwide through the Internet. No patents, no search for a manufacturer and no licensing. The sourcing and manufacturing of his follow-up inventions, products in what was now a formal company called 3D Robotics Inc., were outsourced to a firm called Sparkfun until volume reached the level that required Anderson to open his own manufacturing plant.

More Than Technology

The third industrial revolution is about more than desktop manufacturing technology. As with the first two industrial revolutions, technology is only a starting point for the radical rethinking of organizations and work. Unlike traditional companies, no credentials are needed to get a “job.” Anyone with good ideas can get online, share them, and find collaborators and team members for their projects. Financing of startups is also evolving, again through the open social networking made possible by the Internet. At the website Kickstarter.com, “people post descriptions of their projects, and anyone can chip in to help,” Anderson writes.

Makers is a fascinating, inspiring description of what is happening today at the cutting edge of manufacturing and technology.

Master the Revenue Cycle

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Once upon a time, writes consultant Phil Fernandez in his book Revenue Disruption, companies were in control of the buying process. Customers needed the company marketers to grab their interest and the company salespeople to give them the information they needed to make their final decisions. Many companies still operate under that old-fashioned paradigm, Fernandez writes. Marketers try through their webpages, Google AdWords and other marketing tools to “hook” a prospect; as soon as the prospect is hooked — because he or she has sent an email asking for information, for example, thus becoming a live lead — the prospect is immediately handed to sales, which is supposed to close the deal. Often, Fernandez notes, the prospect will simply say, “I’m not really interested,” and sales will angrily denounce “another poor lead from marketing.” Eventually, the sales function will ignore the marketing leads, which angers the marketers, and the two functions are quickly engaged in pitched battle.

The Buyer in Control

What both marketing and sales fail to appreciate is that today, buyers are prospects long before the company even knows they exist, Fernandez writes. They wander anonymously throughout the website, they ask friends through LinkedIn for their opinions on the company, they read articles and reviews online — all before showing up on the company’s radar. According to Fernandez, traditional sales strategies and methodologies are based on the salesperson’s timeline: develop leads, make contact and so forth. Fernandez has developed a radical new approach to sales and marketing, called Revenue Performance Management (RPM), that is built around the buyer’s cycle, which he captures in a Revenue Cycle Model.

The Revenue Cycle Model

The first step of the cycle is simply “Aware,” and refers to the entire pool of people who are aware of the existence of your company or its products — nothing more. A buyer moves to the next step, “Friend,” when he or she starts to have positive associations and preferences for the company’s brands or products. If still interested, the buyer becomes a “Name” by giving contact information to the company. The buyer is then qualified by marketing, becoming a “Prospect” and eventually a “Lead” when he or she is ready to engage with the company’s sales organization. In the last two stages of the Revenue Cycle Model, the buyer is an “Opportunity” for as long as he or she is actively engaged with a customer service representative, and a “Customer” when the deal is closed.

The steps of the cycle can be grouped in three stages: Seed Nurturing (Aware, Friend); Lead Nurturing (Name, Prospect, Lead); and Qualification to Close (Opportunity, Customer).

Why Marketing Counts

This Revenue Cycle Model is a more accurate depiction of the prospect’s journey than traditional sales cycle models. In traditional sales cycles, the sale begins with the prospect’s first contact with a sales representative. In reality, this step is in the middle of the buyer’s journey, Fernandez writes. The Revenue Cycle begins at the start of the journey, when the buyer is first encountering information produced by marketing.

Thus, according to Fernandez, marketing is considered part-and-parcel of the sales process. This is a departure from the traditional approach of most companies, which consider the sales function as a profit center and the marketing function as a cost center. Marketing itself might be to blame somewhat since it is reluctant to use the revenue language of salespeople. It is clear that marketing, according to Fernandez, is a growth investment.

Fernandez compares RPM to Six Sigma — a series of new business processes that leads to continuous improvement of revenue performance. Lead scoring, for example, is a process that identifies promising leads versus leads that are premature. RPM also includes careful tracking of Key Performance Indicators, the metrics that monitor the effectiveness of the company’s revenue functions.

Calling for new business processes, new metrics, new relationships between the formerly antagonistic functions of sales and marketing, and even new executive positions (Chief Revenue Officer), Revenue Disruption is a detailed and insightful blueprint for revolution.

Building Worlds that Kids Love

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I was inspired by our recent interview with Michael Araten, CEO of K’NEX toy company, as part of our ongoing series of Executive Insights™ videos. So I decided to share with you some of the nuggets of wisdom from the interview.

Creativity – at K’NEX they have a process for creating new products and innovations that include consumer research with kids and their parents, a set of parameters for product development that looks at the marketplace and competitors, the inclusion of all disciplines within the company in the creative process, and a search program for new ideas among kids that includes scholarship awards.

Community – K’NEX connects with the community through three-tiers of communication. They connect with kids through a Kids Club, offer parents support through safety tips, age appropriate toy guidelines and opportunities to review their products, and have an education division to support teachers and schools in the use of their construction products with a tie-in to curriculum.

Environment – K’NEX’s manufacturing arm Rodon Group has worked hard to develop many environmentally sound practices including becoming landfill free (all waste is recycled or used for energy production), recycling water and plastic waste, and inspiring employees to reduce waste as well.

Made in America – Over the past 10 years K’NEX has brought manufacturing back to the U.S. to the point that 95% of the product is now produced here. Much of this was done by lowering labor costs, the one advantage that China has had in the past over U.S. companies. In the process, they have also helped start a consortium of local manufacturers to apply those principles to other companies.

Employee Development – K’NEX works with local technology schools to encourage students to enter the manufacturing workforce and provides an internship program that takes students from playing with toys to working to design them. Because Rodon’s manufacturing process is highly automated, the jobs they provide are higher-paying technical jobs rather than assembly-line jobs.

K’NEX is the kind of company that can serve as a model for other U.S. companies as to the right ways to do business. The principles they have developed provide educational products, local jobs, lower impact on the environment and they give back to the community in the process.

If you’d  like to hear the full interview with Michael Araten, subscribe to Soundview’s Premium Subscription. This interview is one of over 45 Executive Insights videos that are included in our library.